City plans to sell parking garages to raise money for rec centers

Baltimore Sun photo by Matt Bylis

A new rec center is opening Monday in Morrell Park. Baltimore officials hope to raise up to $60 million by selling off four of the city's parking garages, pledging to use the money for improved recreation centers.

A new rec center is opening Monday in Morrell Park. Baltimore officials hope to raise up to $60 million by selling off four of the city's parking garages, pledging to use the money for improved recreation centers. (Baltimore Sun photo by Matt Bylis)

Luke Broadwater and Danae King, The Baltimore Sun

Baltimore officials hope to raise up to $60 million by selling off four of the city's downtown parking garages, pledging to use the money for improved recreation centers.

The plan comes as analysts say some public assets are fetching a high price from private investors, and as the city attempts to overhaul dozens of aging recreation facilities. On Monday, city officials will open the first new recreation center — the Morrell Park Community Center — to be built from scratch in a decade.

The 17,000-square-foot center in Southwest Baltimore is one of three new facilities Mayor Stephanie Rawlings-Blake pledged to build after she closed four centers and transferred 10 others to different operators in the past two years.

"We had to right-size recreation centers, but we had to plan for how to move forward," Rawlings-Blake said Friday. "It was clear people didn't want the status quo. You can't have better and the status quo at the same time."

The Morrell Park center cost $4.4 million to design and build. City officials are hoping they can sell four of the city's 17 parking garages in the next year, netting about $60 million after $24 million in debt is retired. The administration plans to submit legislation to the City Council next month authorizing officials to sell garages on Eutaw, Paca, Gay and St. Paul streets in downtown Baltimore.

The city selected the garages because they are near bustling areas, making them attractive to investors, parking officials said. And they are not near residential areas where limited parking is a major concern, said Tiffany James, a spokeswoman for the Parking Authority of Baltimore.

The four garages currently bring in $400,000 a year through fees, but officials say the lost revenue can be offset through other city parking initiatives. The garages are currently managed by private companies, meaning no city employees will face layoffs, they said. Officials at PMS Parking of Baltimore, which runs two of the garages, were not available for comment Friday.

"The sale of these garages will place the city in a better financial position," said deputy finance director Henry Raymond. "The market is hot. Interest rates are favorable. This is the prime time for the city to be agile and nimble."

Raymond said he hopes the City Council moves "as quickly as possible" on the bill. He added: "If the city does not believe we are getting a good price, we will not sell."

Rawlings-Blake said the money would be dedicated to recreation, but said she couldn't commit to any specific renovations or new construction projects until the deal is finalized.

The proposed legislation places no restrictions on the rates at the garages or development of the sites, but city officials say they would ask a buyer to keep the facilities as parking garages for at least 20 years.

Economist Anirban Basu, who runs the Baltimore-based consulting firm Sage Policy Group, said he believes the strategy is wise. He cited Standard & Poor's recent upgrade of Baltimore's bond rating as evidence that city officials have been making fiscally sound decisions.

"As a practical matter, cities may not be the best owners of parking garages," Basu said. "The private sector is putting a premium on cash flow. Assets with steady cash flow are fetching large prices. It's also pretty clear the city's recreational infrastructure is not what it ought to be. This seems to be a pretty good move."

Since 2012, the city has unloaded 14 of its 55 recreation centers. Four were closed, while 10 others were transferred to private organizations or the school system. The mayor said the idea was to offer more and better programs at better, if fewer, centers.

The Rita R. Church Community Center opened in Clifton Park last year after officials renovated a historic pavilion. After Morrell Park officially opens Monday, the administration plans to build a new facility in Cherry Hill. A large-scale expansion of the Virginia Baker center in Patterson Park is on hold amid community concerns.

City officials have also rehabbed or renovated 18 centers since 2011, they said.

Tracey Estep, chief of recreation center operations, said the city's goal is to transform the centers from places with activities only for young children to community centers that attract adults as well.

The center in Morrell Park was scheduled to open last year but was delayed in part because of weather, she said.

Baltimore City Council Vice President Edward Reisinger, who lives in Morrell Park, said he's excited about the new center after community members ran programs out of a trailer for years. "It's beautiful," he said. "It's state of the art."

Reisinger added that he supports the sale of the garages in concept, but wants to hear details about the proposal.

"There are a lot of questions that need to be asked," he said.

On Friday, children were already using the new center in Morrell Park. It offers an open gym with basketball hoops and bleachers, a computer lab, fitness room, senior room, community room, arts and crafts room and areas outside for eating and playing.

"I think it's really nice —it's really fun," said Sarah Main, 7, of Morrell Park, who has attended a day camp hosted by the city at the site. She said she has played dodge ball, participated in races and done arts and crafts with other children since the center unofficially opened this summer.

Bob Harrison, 82, who has lived in Morrell Park for 53 years, said he watched the construction from start to finish. At first, he said, he had reservations about the new building. "I was afraid it was going to draw a bunch of unruly teenagers," he said.

Now, Harrison said, he's "all for" the center.

"I think this place has all kinds of possibilities. ... It should improve the community," he said.